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RULES OF BANKRUPTCY PROCEDURE

FOR THE
TRIAL DIVISION OF THE SUPREME COURT
OF THE FEDERATED STATES OF MICRONESIA

 TABLE OF CONTENTS

                                      I.  SCOPE OF RULES ) AND FORMS
  Rule 1001.  Scope of Rules and Forms; Short Title
  Rule 1002.  Start of Case
  Rule 1003.  Involuntary Application
          (a) Transferor or transferee of claim
          (b) Jointer of applicants after filing
  Rule 1004.  Involuntary Application Against a Partnership
  Rule 1004.1.  Application for an Infant or Incompetent Person
  Rule 1005.  Caption of Application
  Rule 1006.  Filing Fee
          (a)  General requirement
          (b)  Payment of filing fee in installments
               (1)  Petition for permission to pay filing fee in installments
               (2)  Action on petition
               (3)  Postponement of attorney's fees
          (a)  Who may contest application
          (b)  Defenses and objections; when presented
          (c)  Effect of motion
          (d)  Claims against applicants
          (e)  Other pleadings
          (a)  Contested application
          (b)  Default
          (a)  Dismissal and Transfer of cases
               (1)  Cases filed in proper state
               (2)  Cases filed in improper state
          (b)  Procedure when applications involving the same debtor or related debtors are filed in different states.
          (a)  Cases involving same debtor
          (b)  Cases involving two or more related debtors
          (c)  Expediting and protective orders
          (a)  Voluntary dismissal; dismissal for want of prosecution or other cause.
          (b)  Dismissal for failure to pay filing fee.
          (c)  Suspension
          (d)  Procedure for dismissal or conversion
          (e)  Dismissal of individual debtor's chapter 2 case for substantial abuse
          (1)  Filing of lists, inventories, schedules, statements
          (2)  New filing periods
          (3)  Claims filed before conversion
          (4)  Turnover of records and property
          (5)  Filing final report and schedule of post application debts
               (a)  Conversion of Chapter 3 case
               (b)  Conversion after confirmation of a plan
          (6)  Filing of post application claims; notice

                 PART II.  OFFICERS AND ADMINISTRATION; NOTICES; MEETINGS; EXAMINATIONS; ELECTIONS; ATTORNEYS AND ACCOUNTANTS
          (a)  Appointment
          (b)  Movant's bond
          (c)  Appointment Order
          (d)  Turnover and report
     (a)  Twenty-day notices to interested parties
     (b)  Twenty-five-day notices to interested parties
     (c)  Content of notice
          (1)  Proposed use, sale, or lease of property
          (2)  Notice of hearing on compensation.
          (3)  Notice of Hearing on Confirmation When Plan Provides for an Injunction.
     (d)  Notice to equity security holders
     (e)  Notice of no dividend
     (f)  Other notices
     (g)  Addresses of notices.
     (h)  Notices to creditors whose claims are filed
     (i)  Notices to committees
     (j)  Notices to the Federated States of Micronesia
     (k)  Notice by publication
     (l)  Orders designating matter of notices
     (m)  Caption
     (a)  Date and place
     (b)  Order of meeting
          (1)  Meeting of creditors
          (2)  Meeting of equity security holders
          (3)  Right to vote
     (c)  Record of meeting
     (d)  Adjournment
     (f)  Special meetings
     (g)  Final meeting
     (a)  Examination on motion
     (b)  Scope of examination
     (c)  Compelling attendance and production of documentary evidence
     (d)  Time and place of debtor's examination
     (a)  Order to compel attendance for examination
     (b)  Conditions of release.
     (a)  Applicability
     (b)  Definitions
          (1)  Proxy.
          (2)  Solicitation of proxy
     (c)  Authorized solicitation
     (d)  Solicitation not authorized.
     (e)  Data required from holders of multiple proxies
     (f)  Enforcement of restrictions on solicitation
     (a)  Motion to review appointment
     (b)  Selection of members of committee
     (c)  Failure to comply with requirements for appointment
     (a)  Selection of single trustee for estates being jointly administered
     (b)  Appointment of receivers or trustees for estates being jointly administered
          (1)  Chapter 2 liquidation cases
          (2)  Chapter 3 reorganization cases
     (c)  Potential conflicts of interest
     (d)  Separate accounts
     (a)  Blanket bond.
     (b)  Proceeding on bond
     (a)  Trustee
     (b)  Successor receiver or trustee
     (a)  Record to be kept
     (b)  Summary of record
     (a)  Application for an order of employment
     (b)  Services rendered by member or associate of firm of attorneys or accountants.
     (a)  Application for compensation or reimbursement
     (b)  Disclosure of compensation paid or promised to debtor's attorney
     (c)  Disclosure of compensation paid or promised to bankruptcy application preparer.
     (a)  Payment or transfer to attorney before order for relief
     (b)  Payment or transfer to attorney after order for relief
     (a)  Permissive intervention
     (b)  Intervention by Attorney General of a State
     (c)  Service on entities covered by this rule
     (a)  Data required
     (b)  Failure to comply; effect

          PART III.  CLAIMS AND DISTRIBUTION TO CREDITORS AND EQUITY INTEREST HOLDERS; PLANS
     (a)  Form and content
     (b)  Who may execute
     (c)  Claim based on a writing
     (d)  Evidence of perfection of security interest
     (e)  Transferred claim
          (1)  Transfer of claim other than for security before proof filed.
          (2)  Transfer of claim other than for security after proof filed
          (3)  Transfer of claim for security before proof filed
          (4)  Transfer of claim for security after proof filed
          (5)  Service of objection or motion; notice of hearing
     (f)  Evidentiary effect
     (a)  Necessity for filing
     (b)  Place of filing
     (c)  Time for filing
     (a)  Applicability of rule
     (b)  Schedule of liabilities and list of equity security holders
           (1)  Schedule of liabilities
           (2)  List of equity security holders
     (c)  Filing proof of claim
           (1)  Who may file.
           (2)  Who must file
           (3)  Time for filing
           (4)  Effect of filing claim or interest
     (d)  Proof of right to record status
       (a)  Filing of claim
       (b)  Filing of acceptance or rejection; substitution of creditor
       (a)  Identification of plan
       (b)  Disclosure statement
       (c)  Injunction Under a Plan
       (a)  Hearing on disclosure statement and objections
       (b)  Determination on disclosure statement
       (c)  Dates fixed for voting on plan and confirmation
       (d)  Transmission and notice to creditors and equity security holders
       (e)  Transmission to beneficial holders of securities
       (f)  Notice and Transmission of Documents to Entities Subject to an Injunction Under a Plan.
       (a)  Conditional approval of disclosure statement
       (b)  Application of Rule 3017.
       (c)  Final approval
            (1)  Notice
            (2)  Objections
            (3)  Hearing
       (a)  Entities entitled to accept or reject plan; time for acceptance or rejection.
       (b)  Acceptances or rejections obtained before application.
       (c)  Form of acceptance or rejection.
       (d)  Acceptance or rejection by partially secured creditor.
       (a)  Deposit.
       (b)  Objection to and hearing on confirmation in a Chapter 3 case.
             (1)  Objection.
             (2)  Hearing.
       (c)  Order of confirmation.
       (d)  Retained power.
                        PART IV.  THE DEBTOR: DUTIES AND BENEFITS
       (a)  Relief from stay; prohibiting or conditioning the use, sale, or lease of property.
            (1)  Motion
            (2)  Ex parte relief
       (b)  Use of cash collateral
            (1)  Motion; service
            (2)  Hearing
            (3)  Notice
       (c)  Obtaining credit
            (1)  Motion; service
            (2)  Hearing
            (3)  Notice
       (d)  Agreement relating to relief from the automatic stay, prohibiting or conditioning the use, sale, or lease of property, providing adequate protection, use of cash collateral, and obtaining credit
            (1)  Motion; service
            (2)  Objection
            (3)  Disposition; Hearing
            (4)  Agreement in settlement of motion
       (a)  Claim of exemptions.
       (b)  Objections to claim of exemptions.
       (c)  Burden of proof.
       (d)  Avoidance by debtor of transfers of exempt property.
       (a)  Time for filing complaint objecting to discharge; notice of time fixed.
       (b)  Extension of time.
       (c)  Grant of discharge.
       (d)  Applicability of rules in Part VII
       (e)  Discharge order
       (f)  Registration in other states.
       (g)  Notice of discharge.
       At the trial on a complaint objecting to a discharge, the plaintiff has the burden of proving the objection.
       (a)  Persons entitled to file complaint.
       (b)  Time for starting proceeding.
       (c)  Time for filing complaint under 208(2)(a) in chapter 2 liquidation and chapter 3 reorganization cases; notice of time fixed.
       (d)  Applicability of Part VII rules.
                                        PART V.  COURTS AND CLERKS
       (a)  Court always open.
       (b)  Trials and hearings; orders in chambers.
       (c)  Clerk's office.
       (a)  Approval of appointment of relatives prohibited.
       (b)  Judicial determination that approval of appointment or employment is improper.
       (a)  Bankruptcy dockets.
       (b)  Claims register.
       (c)  Judgments and orders.
       (d)  Index of cases; certificate of search.
       (e)  Other books and records of the clerk.
       (a)  Disqualification of judge.
       (b)  Disqualification of judge from allowing compensation.
       (a)  Filing; Place of filing.
       (b)  Error in filing.
       (a)  Filing of record or transcript.
       (b)  Transcript fees.
       (c)  Admissibility of record in evidence.
       (a)  Abstention from hearing a proceeding.
       (b)  Effect of filing of motion for abstention.

 

              PART VI.  COLLECTION AND LIQUIDATION OF THE ESTATE
       (a)  Accounting required.
       (b)  Examination of administration.
       (a)  Notice of proposed use, sale, or lease of property.
       (b)  Objection to proposal.
       (c)  Sale free and clear of liens and other interests.
       (d)  Sale of property under $2,500.
       (e)  Hearing.
       (f)  Conduct of sale not in the ordinary course of business.
       (a)  Proceeding to assume, reject, or assign.
       (b)  Proceeding to require trustee to act.
       (c)  Notice.
       (a)  Notice of proposed abandonment or disposition; objections; hearing.
       (b)  Motion by interested party.
                               PART VII.  ADVERSARY PROCEEDINGS
       (a) Summons; service; proof of service.
       (b) Service by first class mail.
       (c) Service by publication.
       (d) Nationwide service of process.
       (e) Summons: time limit for service.
       (f) Personal jurisdiction.
       (a) Required disclosure.
       (b) Time for filing.
       (a) Applicability of FSM Civil Procedure Rule 8.
       (b) Attorney's fees.
       (a) When presented.
       (b) Applicability of FSM Civil Procedure Rule 12(b)-(h).
       (a) Judgments.
       (b) Costs.
                         PART VIII.  APPEALS TO APPELLATE DIVISION
       (a) Appeal as of right; how taken.
       (b) Appeal by leave; how taken.
       (c) Voluntary dismissal.
       (a) Ten-day period.
       (b) Effect of motion on time for appeal.
       (c) Extension of time for appeal.
       (a) Petition for Permission to Appeal.
       (b) Content of motion; answer.
       (c) Determination of motion.
       (a) Briefs.
       (b) Appendix to brief.
                                       PART IX.  GENERAL PROVISIONS
       (a)  Legibility; abbreviations.
       (b)  Caption.
       (c)  Filing.
       (a)  Computation.
       (b)  Enlargement.
       (c)  Reduction.
       (d)  For motions affidavits.
       (e)  Time of service.
       (f)  Additional time after service by mail.
       (a) Authority to act personally or by attorney.
       (b) Notice of appearance.
       (c) Power of attorney.
       (a) Signing of papers.
       (b) Representations to the court.
       (c) Sanctions.
       (d) Inapplicability to discovery.
       (e) Verification.
       (f) Copies of signed or verified papers.
       (a) Persons authorized to administer oaths.
       (b) Affirmation in lieu of oath.
       (a) Form and Service.
       (b) Opposition.
       (c) Waiver and Consent.
       (a) Motion.
       (b) Service.
       (c) Application of Part VII Rules.
       (d) Testimony of Witnesses.
       (e) Attendance of Witnesses.
       (a) Compromise.